If you're a 1P vendor, your ACOS is deceiving you.
By Ant Finch · September 23, 2026 · Curated by George's Blog
If you're a 1P vendor, your ACOS is deceiving you.
ACOS is ad spend divided by the retail sales it drove....but as a vendor you don't earn retail price. You pay Amazon an invoice price, and then terms get deducted.
Here's an example....
Retail sales fron ads: £100
Ad spend at 10% ACOS: £10
Invoice value behind that £100 of sales: £60
Your dashboard says 10%.
Against the revenue you actually earn, it's 16.7%.
Plus that's before terms, promotions and chargebacks are taken from the same £60.
This is how you end up with ad campaigns that look efficient and an ASIN level P&L that doesn't.
Three checks I'd run before signing off next quarter's ad budget...
➡️ Measure ad spend against invoice sales, not retail sales
➡️ Set the ACOS cap per ASIN from its net margin
➡️ Stop paying to defend search terms you already win
Ads fail when the ACOS you target is linked to an unprofitable sku.
What number is your target ACOS based on?
----
🚀 I help Amazon vendors fix the issues that slow sales and kill margin.